Split year treatment: 1000 tax for being 5 days over limit!

[Deleted User]

Why not just write to HMRC, stating the facts, and asking for a reconsideration?

urban469

Hi Bill, this is actually for the current tax year. I'm trying to work out how much time I'm allowed to be in the UK without losing non-resident status.

sheramber

would this apply?

http://www.hmrc.gov.uk/manuals/rdrmmanual/RDRM10615.htm

urban469

To an extent, yes. But there's the whole issue of 'significant ties' which seems to determine how many days I can spend in the UK. And also the issue of whether I can be non-resident if I'm outside the UK for just a single tax year.

JasonPr

You really have to read the Statutory Residence Test (SRT) guidance. In your case, it sounds like the third overseas test may apply. You have to do daily record keeping for that, though.

The SRT guidance also contains information about split year treatment. Look at case 1.

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

urban469

That's really interesting, thanks. If the automatic test applies, then I can ignore the Sufficient Ties tests. The third Automatic Overseas Test says this:

1.7 You work full-time overseas over the tax year, without any significant breaks during the tax year from overseas work, and:
 you spend fewer than 91 days in the UK in the tax year
 the number of days in the tax year on which you work for more than 3 hours in the UK is less than 31

I am working full time overseas. So does that mean that as long as I spend April 2015 to January 2016 abroad (working full time), I will be non-resident in the 2015-16 tax year.

mrschaucer

"April 2015 to January 2016" is too vague for HMRC purposes. Just go by the rules stated - if you work full time abroad, are not in the UK more than 90 days AND don't work (when you get back) for more than 30 days at 3+ hours per day before 6 April 16 then you should be considered non resident.

urban469

Thanks. And does that apply even if I'm only working abroad for one tax year (minus 90 days in the UK)?

As for split year treatment: I'm working abroad from 15 Mar 2015 until 15 Jan 2016. Could I consider tax year 2014-15 a split year?

How do I handle my work abroad on the online Self Assessment? Do I put in exact dates and foreign employer name and foreign salary?

mrschaucer

Have you filled in your P85 for leaving the UK? (Or are you doing the self assessments because you are self employed?)
As far as I can see, if you left in March 15, the tax year 14-15 would be a split year, yes. However, the question whether 15-16 is seen as completely non-resident or another split year is a moot one, thinking about it ... In theory you need to be away for a complete tax year, ie 6/5/15 to 5/5/16, but whether you can have your allowance of 90 days all at the end is beyond me! Perhaps a nice HMRC person could advise on here?

urban469

I do Self Assessment because I have some self-employment work alongside my emoloyment work most years. I haven't done a P85 (do I need to?) but I did write to HMRC before I left, telling them my leaving date and that I was going to work abroad full time for a non-UK employer.

Like you say, if someone can advise whether 2015-16 would be a non-resident year if I'm away from 15 Mar 2015 to 15 Jan 2016, that would be great.